ACIT, New Delhi V. M/s Anjala Exhibitors Pvt. Ltd., New Delhi

ITA 4229/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3147 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 01-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PADAM SINGH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER I.T.A. NOS.4229/DEL/2016 (ASSESSMENT YEARS 2012-13) ACIT VS. ANJALA EXHIBITORS PVT. LTD. CIRCLE-2(2), ROOM NO. 392, G-80, C.R.BUILDING, I.P.ESTATE LAJPAT NAGAR-I NEW DELHI NEW DELHI PAN : AAACA0219J ASSESSEE BY : SH.RANJAN CHOPRA, CA REVENUE BY :SH., PADAM SINGH SR. DR DATE OF HEARING: 27.02.2018 DATE OF PRONOUNCEMENT: 28.02.2018 ORDER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT (HEREINAFTER REFERRED TO AS 'THE REVE NUE') BY FILING THE AFORESAID APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 10.05.2016 PASSED BY LD. COMMISSIONER OF INCOME TAX(APPEALS)-I , NEW DELHI QUA THE ASSESSMENT YEAR 2012-13 ON THE GROUNDS INTER ALIA T HAT : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN HOLDING THAT INCOME RECEIVED FROM M/S. PVR LTD. WAS IN THE NATURE OF RENTAL INCOME AS AGAINST INCOME FROM OTHER SOURC ES AS ASSESSEE BY THE AO AND ALLOWING CONSEQUENTIAL RELIEF PF RS. 38, 38,228/-. 2 I.T.A.NO.4229/DEL/2016 ANJALA EXHIBI TORS PVT. LTD. 2. DEPARTMENTS APPEAL ON THE ABOVE ISSUE IS PENDIN G BEFORE ITAT FOR AY 2008-09, 2009-10, 2010-11 & 2011-12. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE THE ASSESSEE BEING OWNER OF A LEASEHOLD PROPERTY SITUATED AT NARIANA INDUSTRIAL AREA, NEW DELHI RUN PAYAL CINEMA TILL T HE YEAR 2000 BUT THEREAFTER ON 18.05.2000, THE ASSESSEE COMPANY ENTERED INTO OP ERATION AND MANAGEMENT WITH M/S. PRIYA VILLAGE ROADSHOW LTD. (PVR) FOR REF URBISHMENT, DEVELOPMENT, MANAGEMENT AND OPERATION OF THE CINEMA. ASSESSEE CL AIMED RENTAL INCOME OF RS. 1,27,94,093/- AS ITS SHARE FROM THE ABOVE CINEM A AND RS. 44,93,880/- FROM THE STATE BANK OF BIKANER AND JAIPUR. AO REJECTING THE CONTENTION RAISED BY THE ASSESSEE DISALLOWED 30% STATUTORY DEDUCTION ON THE CLAIMED RENTAL INCOME AMOUNTING TO RS. 38,38,228/- ON THE GROUND THAT THE INCOME FROM PYAL CINEMA IS INCOME FROM OTHER SOURCES AND NOT INCOME FROM T HE HOUSE PROPERTY. 3. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A ) BY WAY OF FILING THE APPEAL WHO HAS CONFIRMED THE ADDITION BY DISMISSING THE APPEAL. FEELING AGGRIEVED THE ASSESSEE HAS COME UP BEFORE THE TRIBU NAL BY WAY OF FILING PRESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORITIES REPRESENTATIVE OF THE PARTIES TO THE APPEAL, PERUSED THE ORDER PASSED BY THE REVENUE AUT HORITIES BELOW AND DOCUMENT BROUGHT ON RECORD. 5. LD. CIT(A) ALLOWED THE APPEAL FILED BY THE ASSES SEE BY MAKING FOLLOWING OBSERVATION :- I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT AND OBSERVATION OF THE ASSESSING OFFICER. I FIND THAT HONBLE ITAT DEL HI A BENCH VIDE THEIR ORDER DATED 31.05.2013 IN ITA NO. 162/DELHI/2 012 FOR A.Y. 2007- 3 I.T.A.NO.4229/DEL/2016 ANJALA EXHIBI TORS PVT. LTD. 08 HAVE HELD THAT THE RECEIPT FORM PVR LTD. SHOULD BE TREATED AS INCOME FROM HOUSE PROPERTY AND ALL CONSEQUENTIAL BE NEFITS AND DEDUCTIONS SHOULD BE ALLOWED TO THE ASSESSEE. I FIN D THAT THE APPEALS OF THE APPELLANT FOR THE AY 2008-09, 2009-10, 2010-11, 2011-12 WAS ALLOWED BY MY PREDECESSOR VIDE APPELLATE ORDER DATE D 31.12.2012, 01.01.2013, 14.08.2014 AND 14.01.2015 HOLDING THAT INCOME RECEIVED FROM M/S PVR LTD. WAS IN THE NATURE OF RENTAL INCOM E AND SAME REQUIRES TO BE TAXED AS INCOME FROM HOUSE PROPERTY. I FIND THAT THERE IS NO CHANGE IN THE FACTS AND CI RCUMSTANCES OF THE CASE DURING THIS YEAR AS COMPARED TO A.Y. 2007-08, 2008- 09, 2009-10, 2010- 11 AND 2011-12 AS PROPERTY IN QUESTION IS THE SAME I.E. PAYAL CINEMA. IN VIEW OF THE ABOVE FACTS OF THE CASE, THE AO IS D IRECTED TO TREAT THE RECEIPT FROM PVR LTD. AND STATE BANK OF BIKANER & JAIPUR AS INCOME FROM HOUSE PROPERTY. THE ADDITION OF RS. 38,38,228/ - IS DIRECTED TO BE DELETED. THIS GROUND OF APPEAL IS ALLOWED. 6. THE REVENUE HAS MERELY FILED THE PRESENT APPEAL ON THE SOLE GROUND THAT THE DEPARTMENT HAS SINCE FILED THE APPEALS WHICH A RE PENDING ADJUDICATION BEFORE THE TRIBUNAL FOR AY 2008-09, 2009-10, 2010-1 1, 2011-12 AND AS SUCH THE CIT(A) HAS ERRED IN DELETING THE ADDITION. HOW EVER, THE LD. AR FOR THE REVENUE BROUGHT ON RECORD, THE COPY OF ORDERS PASSE D BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2007-08, 2008-09, 2009-10, 2010-11 AND 2011- 12 WHEREBY ISSUE IN CONTROVERSY HAS BEEN DECIDED I N FAVOUR OF THE ASSESSEE. 7. CO-ORDINATE BENCH OF TRIBUNAL IN ASSESSEES OWN CAS E FOR AY 2007-08 DELETING THE ADDITION BY LD. CIT(A) MADE BY AO BY T REATING THE RECEIPT FROM PVR AS INCOME FROM OTHER SOURCES RATHER ORDERED TO TREAT THE RECEIPT AS INCOME FROM HOUSE PROPERTY BY MAKING FOLLOWING OBSERVATION :- 15. RESPECTFULLY FOLLOWING THE JUDGMENT OF HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF PAREKH TRADERS VS. CIT (POONA), (SUPRA ) WE 4 I.T.A.NO.4229/DEL/2016 ANJALA EXHIBI TORS PVT. LTD. HOLD THAT INCOME DERIVED AS RENT FROM PROPERTY MUST BE COMPUTED UNDER THAT SPECIFIC HEAD REGARDLESS OF THE FACT THA T PROPERTY HAD AT ONE POINT OF TIME BEAN UTILIZED BY THE ASSESSEE FOR BUSINESS PURPOSES. SUCH PROPERTY CANNOT BE TREATED AS A BUSINESS ASSET AND RENT THEREOF AS INCOME FROM BUSINESS. IN VIEW OF ABOVE, WE FURTH ER OBSERVE THAT A DISTINCTION MUST BE DRAWN BETWEEN THE LETTING OUT O F LAND OR HOUSE PROPERTY ON THE ONE HAND AND OF PLANT AND MACHINERY ON THE OTHER HAND. THE HON'BLE BOMBAY HIGH COURT HAS CLEARLY HEL D THAT PLANT AND MACHINERY ARE COMMERCIAL ASSETS AND THEIR EXPLO ITATION EVEN BY MEANS OF LETTING OUT, YIELDS OR BRING INCOME FROM B USINESS AND PER CONTRA, INCOME EARNED FROM LETTING OUT THE BUILDING IS INCOME FROM PROPERTY. IN THE CASE IN HAND THE PVR LTD. TAKEN OV ER ONLY CINEMA BUILDINGS ON RENT AND REMAINS FURNITURE, FIXTURES A ND OTHER EQUIPMENTS HAVE BEEN RETURNED BY THE PVR LTD. TO TH E ASSESSEE, ACCORDINGLY FIXED RENTAL EARNED THEREFROM DESERVES TO BE TREATED AS RENTAL INCOME FROM HOUSE PROPERTY. RESULTANTLY, GRO UND NO.2 OF THE ASSESSEE IS ALLOWED WITH A DIRECTION TO THE AO THAT THE RECEIPTS FROM PVR LTD. BY THE ASSESSEE BE TREATED AS INCOME FROM HOUSE PROPERTY AND ALL CONSEQUENTIAL BENEFITS AND DEDUCTIONS BE AL LOWED TO THE ASSESSEE IN THIS REGARD. 8. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE AND THE FACT THAT THERE IS NO CHANGE IN THE FACTS OF THIS CASE AND FOLLOWING DECI SION RENDERED BY THE CO- ORDINATE BENCH OF TRIBUNAL IN ASSESSEES OWN CASE B Y TAKING CONSISTENT VIEW THATTHE INCOME DERIVED BY THE ASSESSEE FROM PVR LTD . HAS BEEN RIGHTLY ORDERED TO BE TREATED AS INCOME FROM HOUSE PROPERTY. HENCE, FINDING NO 5 I.T.A.NO.4229/DEL/2016 ANJALA EXHIBI TORS PVT. LTD. ILLEGALITY OR PERVERSITY IN THE IMPUGNED ORDER PASS ED BY LD. CIT(A) THE PRESENT APPEAL FILED BY THE REVENUE IS DISMISSED. 9. ORDER PRONOUNCED IN THE OPEN COURT ON 28 FEB., 2 018. SD/- SD/- (B.P.JAIN) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 28 TH FEB. 2018 BINITA COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER .NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 28.02.2018 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 28.02.2018 SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6 KEPT FOR PRONOUNCEMENT SR. PS/PS 7 FILE SENT TO BENCH CLERK SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER 6 I.T.A.NO.4229/DEL/2016 ANJALA EXHIBI TORS PVT. LTD.